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plutherusI've never actually worked out, on paper, a personal budget before. My plan up until today was just make sure I earn enough money and keep recurring expenses down enough that I don't actually have to count from paycheck to paycheck. Unfortunately, all the expenses that have to be paid at the beginning of the month are greater than my paycheck at the beginning of each month. Which means, I have to save some of my previous paycheck.
So this morning, I sat down with an excel spreadsheet, and went through and entered all the bills I know about, figured out how much to spend on food, entertainment, new toys, trips out of town, everything I could think of, and entered it into the spreadsheet, trying to figure out where my money is.
After tweaking the numbers a bit, and deciding to spread payments of past-due bills out over two or three payments, it actually all works out. Fortunately, aside from rent, electricity, and DSL, I have no mandatory expenses. Oh, yeah, and I'm dropping cable. Which means no more TV. But I'm keeping my DVD rental club.
About the payments: hopefully, they'll let me do that. I've never actually done this before. In the past, I've ignored past-due bills, until whatever commodity they were was threatened to be cut off. Today, I actually scheduled payments, and wrote out letters to the individual companies about what the payment plans would be, and how much I would send them and when. I've heard in the past that bill collectors like that sort of thing. I guess, since the alternative is not to get paid, they really have no choice. (Except the power company, that could shut off the power like they are threatening, but the doctor and the cable company have no such recourse, since the treatments already happened, and I'm cutting cable off.
After May 15th, I'll even be able to save some money. A novel concept for me, indeed.
Maybe I should try to figure out how a 401k works next...
So this morning, I sat down with an excel spreadsheet, and went through and entered all the bills I know about, figured out how much to spend on food, entertainment, new toys, trips out of town, everything I could think of, and entered it into the spreadsheet, trying to figure out where my money is.
After tweaking the numbers a bit, and deciding to spread payments of past-due bills out over two or three payments, it actually all works out. Fortunately, aside from rent, electricity, and DSL, I have no mandatory expenses. Oh, yeah, and I'm dropping cable. Which means no more TV. But I'm keeping my DVD rental club.
About the payments: hopefully, they'll let me do that. I've never actually done this before. In the past, I've ignored past-due bills, until whatever commodity they were was threatened to be cut off. Today, I actually scheduled payments, and wrote out letters to the individual companies about what the payment plans would be, and how much I would send them and when. I've heard in the past that bill collectors like that sort of thing. I guess, since the alternative is not to get paid, they really have no choice. (Except the power company, that could shut off the power like they are threatening, but the doctor and the cable company have no such recourse, since the treatments already happened, and I'm cutting cable off.
After May 15th, I'll even be able to save some money. A novel concept for me, indeed.
Maybe I should try to figure out how a 401k works next...
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no subject
Date: 2003-02-25 07:12 pm (UTC)You set up an account via your company, who is enabled to give this type of tax shelter to their employees as a concession from the federal government. They usually have several plans to choose from. So a 401k account is a tax-sheltered place to stick your money while it is invested as you specify in some or all of the choices your company will give you to administer it. Most of the time it goes into mutual funds, which is why so many people lost their entire retirement funds in the past couple years. However, bond funds are available as well, which are much more conservative. It gets taxed when you take it out, but even if you leave it in there you can use it as an asset for credit or loan purposes. Most places will let you borrow from it and pay yourself back.
Mine is about 50/50 stocks and bonds, and i've been told that this is conservative because right now stocks are cheap. But I started doing this 3 years ago when the market was a lot higher, and lost a lot in the first year.
If you're not going to do it through your company, check out IRA's.
Money is an awesome tool. I'm going to try and use mine to retire early. Good luck with yours.